Don’t let the Apple tax affect you.
Apple’s App Store is quietly a major source of revenue for the company.
Whenever an iPhone user subscribes to a service through Apple’s billing platform, the Cupertino giant gives a rebate of up to 30 percent on top of each recurring charge. The practice was so brazen that a court ruled that Apple must allow third-party billing to be offered, and then, last year, the same court found the company in contempt for violating that order when it charged comparable fees to developers for implementing their billing tools.
But app developers had adjusted to Apple’s fee skimming long before the court case was decided. Instead of taking a 15-30 per cent loss on subscription revenue, many developers easily cover these costs by charging users more for subscribing through the App Store. When you subscribe on the App Store, a service that might cost $10 on your company’s website increases to $13. This phenomenon is known as the “Apple Tax.”
YouTube Premium is a great example. We’ve noted that some users may switch existing music subscriptions for YouTube Premium, but the situation is different when subscribing through the App Store. In fact, when we look at YouTube Premium prices, we can see Google charging the Apple tax. When subscribing through the YouTube website, a monthly subscription costs $16 for an individual. Head over to the App Store, however, and the price tag jumps to $21 a month. That’s $5 per month leaving your wallet for no reason other than to help Google complement Apple’s tools, which makes it very difficult to get your money’s worth from YouTube Premium.
Apple’s App Store subscriptions are straightforward to manage, but YouTube Premium isn’t worth paying extra for.
Some people prefer to bill their subscriptions through Apple’s App Store because of how predatory first-party billing can be. Once you give some companies your credit card information, it can be nearly impossible to get them to stop charging you. After searching through the settings menu to find a “cancel subscription” button, which appears to be deliberately hidden like Waldo, you go through three confirmation screens, are presented with a special, one-time-only discount offer, and then are made to fill out a survey explaining why you want to cancel. And if you’re lucky, you might find that some subscriptions from smaller organisations will require you to send an email, or you can resort to changing your credit card to prevent the subscription from being charged. Some subscriptions from smaller organisations will require you to send an email, or you can resort to changing your credit card to prevent the subscription from being charged.
There may be situations where paying the Apple tax on your subscriptions is worth a few extra dollars for the peace of mind that comes with the ability to cancel them with just a few taps on your smartphone. Apple would love to collect its fees from your subscription, but the company also wants you to enjoy using your iPhone and therefore has no direct incentive to treat your credit card like a gremlin.
Even so, it’s worth saving money where you can. Thankfully, YouTube Premium makes it reasonably easy to cancel a subscription on its billing platform. Cancelling is a relatively straightforward process, and Google won’t give you too much guff about your decision to stop paying. If you’re currently paying more for YouTube Premium through the App Store, or if you’re considering signing up for the service, you’re better off staying away from the tax collector at Apple’s walled garden gate.
